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SUGAR LAND, Texas, April 18, 2024 (GLOBE NEWSWIRE) -- Applied Optoelectronics, Inc. (NASDAQ:AAOI), a leading provider of fiber-optic access network products for the internet datacenter, cable broadband, telecom and fiber-to-the-home (FTTH) markets, today announced that it will release financial results for its first quarter ended March 31, 2024 on Thursday, May 9, 2024. Applied Optoelectronics will host a conference call and webcast for analysts and investors to discuss its first quarter 2024 financial resu ...

It may sound counterintuitive but if you want big gains, you have to think small, as in small-cap stocks. Here, the idea is to trade predictability for maximum profit potential.To be sure, the aforementioned elements generally feature a counterbalancing framework. For example, the companies that feature the greatest magnitude of predictability are the established, large-capitalization businesses. However, you’re not going to get much profit potential because everybody expects them to perform consistently.On ...

When you think about tech disruptor stocks, it’s hard not to mention Uber Technologies (NYSE:UBER). By making use of the “dead” space found in millions of cars in the U.S. – and increasingly across the world – Uber not only provided a convenient service but also forged an entirely new sharing economy.That’s really the spirit behind tech disruptor stocks. We’re looking for enterprises that can potentially catapult their offerings into high ground, weeding out competitors and less efficient and effective busi ...

Key PointsApplied Optoelectronics manufactures optical components for data centers, telecoms and cable TV broadband operators.Applied Optoelectronics cut its Q1 2024 EPS and revenue guidance due to price cuts and the Chinese Lunar New Year, which will result in its China factory cutting production during those 15 days, but expect a substantial improvement in Q2 2024.Applied Optoelectronics contract with Microsoft for next-get AOCs ramp-up delays caused B.Riley Securities to downgrade shares to Neutral from ...

PratchayaI covered Applied Optoelectronics (NASDAQ:AAOI) last December on Seeking Alpha. The stock continued its uptrend ultimately hitting $25 per share around February 15. The stock price zig zagged up and down during this time, which allowed my short-term call options strategy great success. I also added shares to my long-term position during this time. I had bought shares around the $18 mark. News of Applied Optoelectronics’ weak Q1-2024 outlook tanked the stock price last week. The company expects ...

Financial Data and Key Metrics Changes - The company reported Q4 2023 revenue of $60.5 million, which was below the guidance range of $63 million to $67 million, primarily due to lower than expected data center revenue [9][13] - Non-GAAP gross margin for Q4 was 36.4%, the highest in five years, exceeding the guidance range of 34.5% to 36% [9][19] - Non-GAAP net income was $1.6 million, or $0.04 per share, at the high end of the guidance range [21] - Adjusted EBITDA for Q4 was $4.8 million, marking a positive performance [9][12] Business Line Data and Key Metrics Changes - Data center products generated $44.5 million in revenue, more than doubling year-over-year but down 9% sequentially [10][15] - CATV segment revenue was $12.6 million, down 67% year-over-year but up 22% sequentially, driven by slow sales of DOCSIS 3.1 equipment [10][13] - Telecom products revenue was $2.8 million, down 56% year-over-year and down 8% sequentially, primarily due to softness in 5G demand [18] Market Data and Key Metrics Changes - 74% of Q4 revenue came from data center products, 21% from CATV, and 5% from FTTH and telecom [13] - The company noted significant traction with new data center customers for 400G and 800G products, expecting meaningful revenue contributions starting in Q2 [12][15] Company Strategy and Development Direction - The company aims to return gross margin to around 40% in the long term, supported by a direct sales model in the CATV business [19] - The transition to DOCSIS 4.0 is anticipated to begin in mid-2024, with optimism for the second half of the year [14] - The company is focused on expanding its product offerings, including 1.6 terabit products expected to contribute in 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softness in Q1 due to the Lunar New Year and price reductions but expects a strong recovery in Q2 and a markedly improved second half of 2024 [12][23] - The company anticipates its first full year of non-GAAP profitability since 2018, driven by new customer traction and product demand [12][23] Other Important Information - The company ended Q4 with $55.1 million in cash and cash equivalents, up from $31.2 million at the end of Q3 [22] - Total debt, excluding convertible debt, decreased to $38.7 million from $46.6 million in the previous quarter [22] Q&A Session Summary Question: Insights on Microsoft project ramp-up - Management indicated that while the project is ramping, it will not reach a $100 million run rate in 2024, but may exit the year at that level [25][27] Question: AI-related applications for 400G products - The 400G products are being used primarily in AI infrastructure, particularly in connections between GPU clusters and switches [30] Question: Cable TV business expectations - The company expects a step function increase in the cable TV business in the second half of the year as new products are introduced [32] Question: Confidence in data center ramp-up - Management expressed confidence in the ramp-up due to continued investment in CapEx and positive customer feedback on new products [38][39] Question: Revenue mix between transceivers and lasers - Currently, 95% of data center revenue comes from transceivers and active optical cables, with expectations for this to remain consistent [43] Question: First quarter outlook by product segment - The decline in Q1 is expected to primarily come from the data center business, with CATV not significantly impacting overall revenue [60]

Part I [Business](index=5&type=section&id=Item%201.%20Business) Applied Optoelectronics, Inc. (AOI) is a vertically integrated fiber-optic product provider, with its internet data center market becoming the largest revenue source in 2023 at **64.9%**, driven by AI demand, despite a slight revenue decrease to **$217.6 million** and high customer concentration Key Financial Performance (2021-2023) (in millions) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | $217.6M | $222.8M | $211.6M | | **Gross Margin** | 27.1% | 15.1% | 17.8% | | **Net Loss** | ($56.0M) | ($66.4M) | ($54.2M) | | **Accumulated Deficit** | ($265.1M) | ($209.1M) | - | Revenue by Market (2023 vs 2022) (in millions) | Market | 2023 Revenue | 2023 % of Total | 2022 Revenue | 2022 % of Total | | :--- | :--- | :--- | :--- | :--- | | **Internet Data Center** | $141.2M | 64.9% | $77.1M | 34.6% | | **CATV** | $59.9M | 27.5% | $118.2M | 53.0% | | **Telecom** | $13.8M | 6.4% | $24.7M | 11.1% | | **FTTH & Other** | $2.7M | 1.2% | $2.8M | 1.3% | - The company relies heavily on a small number of customers. In 2023, Microsoft was the largest customer, accounting for **46.6%** of revenue, a significant increase from **18.4%** in 2022. ATX and Digicomm were other key customers, contributing **15.6%** and **11.3%** of revenue, respectively[18](index=18&type=chunk)[82](index=82&type=chunk) - AOI operates a vertically integrated and geographically distributed manufacturing model with facilities in Sugar Land, Texas (laser chip fabrication); Ningbo, China (labor-intensive components, CATV equipment); and Taipei, Taiwan (optical components, transceivers)[29](index=29&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - As of December 31, 2023, the company had **233** employees in R&D, including **nine** with Ph.D. degrees. R&D departments are located in Texas, Georgia, China, and Taiwan[44](index=44&type=chunk) - The company held **176** U.S. issued patents and **150** patents issued in China and Taiwan as of December 31, 2023, with expiration dates ranging from 2024 to 2043[47](index=47&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from high customer concentration (**92.7%** of 2023 revenue), volatile demand, manufacturing disruptions, high fixed costs, international trade policies, and an ongoing arbitration related to a terminated divestiture - The company is highly dependent on a few key customers. In 2023, the top ten customers accounted for **92.7%** of revenue. Specifically, Microsoft represented **46.6%**, ATX **15.6%**, and Digicomm **11.3%**. The loss of any of these customers would materially harm financial results[81](index=81&type=chunk)[82](index=82&type=chunk) - The company's vertically integrated model results in a high fixed cost base, making gross profits highly sensitive to sales volume fluctuations and potentially leading to high inventory carrying costs if demand falls[99](index=99&type=chunk)[100](index=100&type=chunk) - A significant portion of manufacturing occurs in China and Taiwan, exposing the company to risks from natural disasters, geopolitical tensions, and changes in international trade policies, such as U.S. tariffs on Chinese imports[124](index=124&type=chunk)[146](index=146&type=chunk)[151](index=151&type=chunk) - The termination of the agreement to sell its China manufacturing facilities to Yuhan Optoelectronic has resulted in an arbitration claim filed by the purchaser seeking specific performance. The outcome is uncertain and could adversely affect the business[164](index=164&type=chunk)[165](index=165&type=chunk) - As of December 31, 2023, the company had approximately **$114.9 million** of consolidated indebtedness, which could limit cash flow for operations and expose it to financial risks[131](index=131&type=chunk) - The company's ability to use its U.S. NOLs of approximately **$112 million** and other tax credits may be limited by Section 382 of the Internal Revenue Code if an ownership change occurs[115](index=115&type=chunk) [Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[181](index=181&type=chunk) [Cybersecurity](index=42&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risk through a comprehensive program overseen by the Board and management, involving cross-functional threat mitigation, annual risk assessments, technical safeguards, and incident response plans - The Board of Directors oversees the management of cybersecurity risk and receives regular reports from management[188](index=188&type=chunk) - The company's cybersecurity strategy is built on collaboration, annual risk assessments, technical safeguards, incident response planning, and employee education[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - Primary responsibility for assessing and managing cybersecurity risks lies with the General Manager and MIS Director, who have over **20** years of relevant experience[188](index=188&type=chunk) [Properties](index=43&type=section&id=Item%202.%20Properties) The company owns administrative, manufacturing, and R&D facilities in Sugar Land, Texas, and Ningbo, China, while leasing sites in Duluth, Georgia, and Taipei, Taiwan Company Facilities | Location | Ownership | Approx. Sq. Footage | Use | | :--- | :--- | :--- | :--- | | Sugar Land, Texas | Owned | 139,450 | Admin, Sales, Mfg, R&D | | Duluth, Georgia | Leased | 10,459 | Sales, R&D | | Ningbo, China | Owned | 458,849 | Admin, Sales, Mfg, R&D | | Taipei, Taiwan | Leased | 268,797 | Admin, Sales, Mfg, R&D | [Legal Proceedings](index=43&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in an arbitration with Yuhan Optoelectronic Technology (Shanghai) Co., Ltd. regarding a terminated agreement to sell its China manufacturing facilities, with the outcome currently indeterminable - The company is subject to an arbitration proceeding filed by Yuhan Optoelectronic Technology (Shanghai) Co., Ltd. in Hong Kong[194](index=194&type=chunk)[507](index=507&type=chunk) - The dispute relates to the company's termination of an agreement to sell its China manufacturing facilities. The purchaser is seeking specific performance, and the company has filed counterclaims[507](index=507&type=chunk) [Mine Safety Disclosure](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - Not Applicable[194](index=194&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NASDAQ Global Market under "AAOI", with **35** holders of record as of February 20, 2024, and no cash dividends have ever been paid or are anticipated - Common stock trades on the NASDAQ Global Market under the symbol "AAOI"[196](index=196&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the foreseeable future[197](index=197&type=chunk) [Reserved](index=44&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, revenue slightly decreased by **2.3%** to **$217.6 million**, driven by a **49.3%** CATV decline offset by an **83.2%** data center surge, while gross margin improved to **27.1%** and liquidity was bolstered by a **$70 million** ATM offering and debt refinancing [Results of Operations](index=51&type=section&id=Results%20of%20Operations) In 2023, total revenue decreased by **2.3%** to **$217.6 million**, with an **83.2%** data center increase offsetting CATV and Telecom declines, while gross margin improved to **27.1%** and net loss was **$56.0 million** Revenue by Market (2023 vs. 2022) (in thousands) | Market | 2023 Revenue | 2022 Revenue | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **CATV** | $59,942K | $118,169K | ($58,227K) | (49.3)% | | **Data Center** | $141,213K | $77,094K | $64,119K | 83.2% | | **Telecom** | $13,831K | $24,727K | ($10,896K) | (44.1)% | | **FTTH** | $56K | $129K | ($73K) | (56.6)% | | **Total Revenue** | **$217,646K** | **$222,818K** | **($5,172K)** | **(2.3)%** | - Gross margin increased to **27.1%** in 2023 from **15.1%** in 2022. This was primarily due to a strategic shift to selling branded products directly to MSOs in the CATV segment, price increases, a favorable product mix in the datacenter segment, and non-recurring engineering (NRE) revenue from Microsoft[240](index=240&type=chunk) - General and administrative expenses increased by **$6.6 million** (**14.1%**) in 2023, mainly due to higher professional service fees and share-based compensation expense[245](index=245&type=chunk) - Total other expense increased by **$7.3 million**, primarily due to a **$4.7 million** increase in other expense related to the non-cash cost of debt extinguishment for the 2024 Notes and a **$3.1 million** increase in interest expense from higher interest rates[246](index=246&type=chunk)[247](index=247&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, the company held **$55.1 million** in cash and **$22.5 million** in unused borrowing capacity, having bolstered liquidity by raising **$69.1 million** from an ATM offering and refinancing **$80.2 million** in convertible debt - As of December 31, 2023, the company had **$55.1 million** in cash, cash equivalents, and restricted cash, and **$22.5 million** of unused borrowing capacity[251](index=251&type=chunk)[268](index=268&type=chunk) Cash Flow Summary (in thousands) | Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash used in operating activities** | $(7,929) | $(14,022) | $(11,644) | | **Net cash used in investing activities** | $(14,761) | $(3,834) | $(10,546) | | **Net cash provided by financing activities** | $40,578 | $10,753 | $14,087 | - In 2023, the company completed an "at-the-market" (ATM) offering, selling **7.8 million** shares for net proceeds of approximately **$69.1 million**[255](index=255&type=chunk)[256](index=256&type=chunk) - In December 2023, the company issued **$80.2 million** of **5.250%** convertible senior notes due 2026 and used the proceeds to exchange or repurchase its **5.00%** convertible senior notes due 2024[258](index=258&type=chunk)[447](index=447&type=chunk) [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in inventory valuation, leading to an **$8.7 million** charge in 2023, impairment testing of long-lived assets, and income tax accounting, where a **$78.1 million** valuation allowance is maintained against deferred tax assets due to cumulative losses - Valuation of inventories is a critical estimate. The company recorded excess and obsolete inventory reserve charges of **$8.7 million** in 2023, compared to **$4.9 million** in 2022[277](index=277&type=chunk)[278](index=278&type=chunk) - The company evaluates long-lived assets for impairment when triggering events occur. No impairment charges were recorded in 2021, 2022, or 2023[276](index=276&type=chunk) - Accounting for income taxes requires significant judgment, particularly regarding the realizability of deferred tax assets. Due to a history of cumulative losses, the company has recorded a valuation allowance of **$78.1 million** as of December 31, 2023[280](index=280&type=chunk)[281](index=281&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks stem from foreign exchange rate fluctuations, particularly with the RMB and NT dollar, which accounted for **22%** and **16.7%** of 2023 operating expenses respectively, while interest rate risk is minimized by fixed-rate debt - The company is exposed to foreign exchange risk as a large portion of its business is in China (RMB) and Taiwan (NT dollar)[289](index=289&type=chunk) - In 2023, **22%** of operating expenses were denominated in RMB and **16.7%** in NT dollars. A **1%** adverse change in these exchange rates would have increased operating expenses by **$0.4 million**[291](index=291&type=chunk) - As of December 31, 2023, all company debt bore a fixed interest rate, mitigating exposure to interest rate fluctuations[287](index=287&type=chunk) - The company does not currently use derivative financial instruments to hedge against market risks but may consider them in the future[286](index=286&type=chunk)[293](index=293&type=chunk) [Financial Statements and Supplementary Data](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's consolidated financial statements and accompanying notes, which begin on page F-1 - The required information is incorporated by reference to the consolidated financial statements and notes beginning on page F-1[294](index=294&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=62&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting principles, practices, or financial statement disclosure - None reported[294](index=294&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with the independent auditor issuing an unqualified opinion - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[297](index=297&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[300](index=300&type=chunk) - The independent auditor, Grant Thornton LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[303](index=303&type=chunk) - No material changes to internal control over financial reporting occurred during the last fiscal quarter[300](index=300&type=chunk) [Other Information](index=65&type=section&id=Item%209B.%20Other%20Information) During Q4 2023, several executive officers, including the CEO and CFO, adopted Rule 10b5-1 trading plans for the potential sale of company common stock on December 14, 2023 Executive Rule 10b5-1 Trading Plan Adoptions (Q4 2023) | Name | Title | Date Adopted | Aggregate of Securities to be Sold | | :--- | :--- | :--- | :--- | | Chih-Hsiang (Thompson) Lin | CEO | 12/14/2023 | 60,000 | | Stefan Murry | CFO | 12/14/2023 | 12,000 | | Hung-Lun (Fred) Chang | SVP/North America GM | 12/14/2023 | 18,195 | | David Kuo | SVP/CLO | 12/14/2023 | 40,000 | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=65&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports no foreign jurisdictions that prevent inspections - None reported[311](index=311&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=66&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance, including the adopted Code of Business Conduct and Ethics, is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement - The required information will be included in the definitive proxy statement for the 2024 Annual Meeting of Stockholders and is incorporated by reference[312](index=312&type=chunk) - The company has adopted a Code of Business Conduct and Ethics applicable to all directors, employees, and executive officers[312](index=312&type=chunk) [Executive Compensation](index=66&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders - The required information will be included in the definitive proxy statement for the 2024 Annual Meeting of Stockholders and is incorporated by reference[314](index=314&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=66&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders - The required information will be included in the definitive proxy statement for the 2024 Annual Meeting of Stockholders and is incorporated by reference[315](index=315&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=66&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders - The required information will be included in the definitive proxy statement for the 2024 Annual Meeting of Stockholders and is incorporated by reference[316](index=316&type=chunk) [Principal Accounting Fees and Services](index=66&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders - The required information will be included in the definitive proxy statement for the 2024 Annual Meeting of Stockholders and is incorporated by reference[317](index=317&type=chunk) Part IV [Exhibits, Financial Statements Schedules](index=67&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statements%20Schedules) This section lists exhibits filed with the Form 10-K, including various agreements, and notes that consolidated financial statements are on page F-1, with schedules omitted as information is elsewhere - The consolidated financial statements are listed on the Index to Consolidated Financial Statements beginning on page F-1[319](index=319&type=chunk) - Financial statement schedules have been omitted because the required information is included in the Consolidated Financial Statements or the notes thereto[319](index=319&type=chunk) [Form 10-K Summary](index=67&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - None[319](index=319&type=chunk) Consolidated Financial Statements [Report of Independent Registered Public Accounting Firm](index=78&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Grant Thornton LLP issued an unqualified opinion on the 2023 consolidated financial statements, highlighting critical audit matters in inventory reserve valuation and long-lived asset impairment due to significant judgment and subjective assumptions - The auditor, Grant Thornton LLP, issued an unqualified opinion on the consolidated financial statements[336](index=336&type=chunk) - A critical audit matter was the Inventory Reserve, due to the significant management judgment required to estimate future demand and obsolescence[341](index=341&type=chunk) - A second critical audit matter was the Impairment of Long-Lived Assets, due to the high degree of subjectivity in forecasting future cash flows to assess asset recoverability[343](index=343&type=chunk) [Financial Statements](index=81&type=section&id=Financial%20Statements) As of December 31, 2023, total assets were **$389.2 million** and liabilities **$174.3 million**, with 2023 revenue of **$217.6 million**, a net loss of **$56.0 million**, and **$40.6 million** net cash provided by financing activities Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $172,605 | $183,164 | | **Total Assets** | **$389,186** | **$408,263** | | **Total Current Liabilities** | $93,358 | $138,582 | | **Total Liabilities** | **$174,317** | **$223,593** | | **Total Stockholders' Equity** | **$214,869** | **$184,670** | Consolidated Statement of Operations Data (in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue, net** | $217,646 | $222,818 | $211,565 | | **Gross Profit** | $58,921 | $33,627 | $37,715 | | **Loss from Operations** | $(41,349) | $(58,998) | $(56,766) | | **Net Loss** | **$(56,048)** | **$(66,397)** | **$(54,162)** | | **Net Loss Per Share (Basic & Diluted)** | **$(1.75)** | **$(2.38)** | **$(2.01)** | Consolidated Statement of Cash Flows Data (in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash used in operating activities** | $(7,929) | $(14,022) | $(11,644) | | **Net cash used in investing activities** | $(14,761) | $(3,834) | $(10,546) | | **Net cash provided by financing activities** | $40,578 | $10,753 | $14,087 | | **Net increase (decrease) in cash** | $19,510 | $(5,550) | $(8,979) | [Notes to Consolidated Financial Statements](index=88&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, including revenue recognition shifts, **$80.2 million** in new convertible notes, **$11.9 million** in share-based compensation, a **$78.1 million** deferred tax asset valuation allowance, and an ongoing arbitration contingency - Revenue is recognized when control of products or services is transferred. For 2023, Data Center revenue was **$141.2 million** (**64.9%**) and CATV revenue was **$59.9 million** (**27.5%**), a reversal from 2022 where CATV was the dominant market[384](index=384&type=chunk)[409](index=409&type=chunk) - As of Dec 31, 2023, the company had **$23.2 million** in notes payable and long-term debt, and a net carrying amount of **$76.2 million** for its convertible senior notes due 2026[439](index=439&type=chunk)[440](index=440&type=chunk)[449](index=449&type=chunk) - Total share-based compensation expense was **$11.9 million** in 2023. As of year-end, there was **$12.1 million** of unrecognized expense for RSUs and **$6.6 million** for PSUs[489](index=489&type=chunk)[491](index=491&type=chunk)[493](index=493&type=chunk) - The company maintains a valuation allowance of **$78.1 million** against its deferred tax assets as of Dec 31, 2023, due to a cumulative loss history making it not more-likely-than-not that the assets will be realized[471](index=471&type=chunk) - A significant contingency exists from an arbitration filed by Yuhan Optoelectronic Technology, which is seeking specific performance of a terminated agreement for AOI to sell its China manufacturing facilities. The outcome is currently indeterminable[507](index=507&type=chunk)

Exhibit 99.1 Applied Optoelectronics Reports Fourth Quarter and Full Year 2023 Results Sugar Land, Texas, February 22, 2024 – Applied Optoelectronics, Inc. (NASDAQ: AAOI), a leading provider of fiber-optic access network products for the internet datacenter, cable broadband, telecom and fiber-to-the-home (FTTH) markets, today announced financial results for its fourth quarter and full year ended December 31, 2023. “We’re pleased by the continued progress we have made in improving our gross margin, which com ...

SUGAR LAND, Texas, Feb. 01, 2024 (GLOBE NEWSWIRE) -- Applied Optoelectronics, Inc. (NASDAQ:AAOI), a leading provider of fiber-optic access network products for the internet datacenter, cable broadband, telecom and fiber-to-the-home (FTTH) markets, today announced that it will release financial results for its fourth quarter and full year ended December 31, 2023 on Thursday, February 22, 2024. Applied Optoelectronics will host a conference call and webcast for analysts and investors to discuss its fourth qua ...